An example of a nonprofit/for-profit hybrid business models in the Joseph C. Cordes and C. Eugene Steuerle article stood out. A disbarred lawyer is a founder of a social enterprise nonprofit? Before jumping into conclusion, I researched the nonprofit, Pioneer Human Services (PHS). According to several sources, founder Jack Dalton, was convicted of embezzling his client’s funds. Immediately after serving his prison time, he developed PHS, to provide former convicts employment. PHS has evolved into a dynamic social enterprise. According to Seattle Business, PHS serves about 12,000 people (mostly ex-cons) every year and has three main enterprises around several plants and facilities. They also run large warehouses that handle packaging and distribution for large companies like Nintendo. Such statistics are commendable, considering the reluctance many companies have to employ former convicts. However, is it possible that Dalton simply saw a market based on for-profit using the nonprofit name? I thought of this due to the current American prison system.
Many of corporations are profiting off of prisoners’ labor for below minimum wages. These same prisoners once they get release often are not able to get jobs due to their past. This is the market that Pioneer Human Services has found. Instead of former convicts being in the prison where they had work, they are able to work for PHS. I am sure that PHS pays the ex-cons a legal wage unlike some private corporations, but the for-profit aspect concerns me. Was Jack Dalton intentions with PHS really good? Or did he simply see a market to profit off of former prisoners using the nonprofit name? These questions can be asked about any nonprofit/for-profit hybrid. Are their intentions good or do they simply see a for-profit market for the nonprofit sector?
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